85% of Amazon sellers undervalue their businesses by 50%+ during exits. Why? Private equity firms don’t buy revenue—they buy scalable systems, defensible margins, and predictable growth. Here’s how to structure your brand for a 9-figure exit.
The PE Mindset: What Buyers Demand
The Problem:
Most Amazon businesses are built for short-term cash flow, not long-term value. Fragmented operations, founder dependency, and thin margins repel premium offers.
The Data:
PE firms pay 5–7x EBITDA for average Amazon brands, but 12–15x for those with moats like proprietary tech or global supply chains (Thrasio, 2023).
90% of M&A deals fail due to poor financial documentation (Feedvisor M&A Report, 2023).
The Shift:
Build a business that thrives without you.
Exit-Drivers: 4 Pillars of a $100M+ Valuation
Pillar 1: Financial Transparency
Use tools like SellerBoard or A2X for GAAP-compliant P&L statements.
Key Metric: 25%+ EBITDA margins.
Pillar 2: Supply Chain Scalability
Partner with 3PLs and manufacturers in 3+ regions to mitigate risk.
Case Example: A Brand Partner reduced lead times by 40% using Mexico-based production, boosting valuation multiples.
Pillar 3: Brand Equity Beyond Amazon
Own your customer data (email/SMS lists) and diversify to DTC/wholesale.
Data: Brands with 30%+ off-Amazon revenue fetch 2x higher offers (Tinuiti, 2023).
Pillar 4: Recurring Growth Levers
Subscription models, evergreen product R&D, and automated retention campaigns.
Case Study: How a Brand Partner Secured a $100M Buyout
Pre-Exit Challenges:
$18M revenue, but 90% reliant on Amazon.
Inconsistent margins and manual inventory management.
PE Prep Strategy:
Systems: Automated financial reporting with Linnworks and Settle.
Supply Chain: Dual-sourced production in Vietnam and Brazil (besides China)
Growth: Launched a DTC site (25% of revenue in 18 months).
Leadership: Hired a COO and CFO to reduce founder dependency.
- EBITDA Focus: Cut down all fluff from business to grow EBITDA over 25% of Revenue for 2 years.
Result:
Acquired for 9x EBITDA by a Tier 1 PE firm.
70% of revenue now recurring via subscriptions.
- Systems helped New team scale business to 2 new geographies.
CEO Takeaways: Structuring for a Premium Exit
Document everything: Clean financials are non-negotiable.
Diversify or die: Reduce Amazon dependency to <70% of revenue.
Build a leadership bench: PE wants a turnkey asset.
Focus on EBITDA, not just top-line growth.
Next Steps:
Audit your financials for GAAP compliance.
Explore 1–2 new sales channels (e.g., TikTok, Shopify).
Request a free audit for your brand to see if it qualifies for a partnership.